Time: GOP senators looking for a RICH KATRINA CORPSE for estate tax pitch

[KrazyHorse]

Originally posted by Ming


While the farm may be worth that much "on paper" the odds are that the assests are heavly borrowed against... In addition, that money probably has to be divided among the family members.

Now remind me... are you warm fuzzy friendly democrat or a cold hearted republican?

If the estate has debts then those debts are subtracted from the value of assets in the estate.

If you inherit a 1.5 million dollar farm which has a 750 000$ mortgage taken out on it then you owe whatever the estate tax on 750 000$ is

i.e. nothing

[rah]

Originally posted by Sava
The bigger insult is that you support a party that only cares about the big corporations that crush small business and family farms.

you couldn't handle that I called you out on your generalization so you try different insult.

If ALL the GOP are against small business and farmers, why do they want to repeal the estate tax since it would help farmers and small businesses.
Another generalization that rings untrue.

Want to try a different insult.

[KrazyHorse]

I'm neither a Democrat nor a Republican

I'm a small-d democrat and a small-s socialist

I'm also cold-hearted as hell when it comes to the government propping up unprofitable, inefficient businesses through subsidies, and fuzzy and friendly when it comes to the government providing welfare, health care, education, etc. to all its citizens

[Ming]

Originally posted by KrazyHorse
I'm also cold-hearted as hell when it comes to the government propping up unprofitable, inefficient businesses through subsidies, and fuzzy and friendly when it comes to the government providing welfare, health care, education, etc. to all its citizens

Oh... I see... your attitude is simple. Put them out of work, throw them out of their family home, off their land, and then give them welfare and free health care.

[KrazyHorse]

Throw them off the family farm if the farm isn't making money. Let them get a job which does make money, and let somebody else who can exploit the farm more efficiently do so. If you have an asset worth 1.5 million and can't afford 19000$ every 25 years (once a generation) then you are running your business horribly badly. Especially when the government is already propping your ass up with enormous subsidies.

Agro subsidies and exemptions for family farms or family businesses are simply rewards for running a crappy business.

I have no sympathy for anybody who has that many assets and who makes that little money.

Like I said: sell the farm, buy an index fund, get a real job.

[Drogue]

Originally posted by Oerdin


The estate tax only effects the richest of the rich. If you aren't uber-rich it will never effect you. There are several billionaires who are paying off Congressmen in an attempt to end the estate tax but most people see it as an excellent progressive policy which subsidizes the other 99.99% of the population and prevents the creation of a perminent ruling upper class.

That's true, and is why I support the estates tax, but there are a still a few things that don't feel quite right:

It's money that's already been taxed. The person owns it and pays income tax on it when it's earned, and when they die they pay tax again on it.

What's the difference between a gift to a child and inheritance? Take two families, with equal incomes - one pays $20,000 per year for 12 years for their child's schooling, the other saves the money to provide some backing for when their child wants a house of their own, and sends them to public school. After 12 years, the parents die, and while one pays inheritance tax, the other doesn't. Either this is the case, meaning you're giving an incentive to spend rather than save, or you have the ludicrous position we have in the UK where any gift given 7 years before death is also subject to inheritance tax.

Having said that, the UK is in the position that a heavy inheritance tax on huge fortunes would virtually solve the London housing problem, with the Duke of (either Westminster or Marlborough, I forget which) owning a huge proportion of central London, worth some few billion pounds.

[Dauphin]

The 'family farm' estate tax interests me. Here there are reliefs given to business trade assets such that no tax is payable anyhow.

[Q Classic]

So, let me get this straight... only Republicans are allowed to make political capital out of this?

[GePap]

Krazyhorse 1, Ming 0

[Dauphin]

Originally posted by Drogue
What's the difference between a gift to a child and inheritance? Take two families, with equal incomes - one pays $20,000 per year for 12 years for their child's schooling, the other saves the money to provide some backing for when their child wants a house of their own, and sends them to public school. After 12 years, the parents die, and while one pays inheritance tax, the other doesn't. Either this is the case, meaning you're giving an incentive to spend rather than save, or you have the ludicrous position we have in the UK where any gift given 7 years before death is also subject to inheritance tax.

Its why I think the tax should be scrapped. Not because its unfair in principle, just that its got massive loopholes.

[KrazyHorse]

Originally posted by Drogue

It's money that's already been taxed. The person owns it and pays income tax on it when it's earned, and when they die they pay tax again on it.

No, their estate does.

Hell, if it makes you feel better then we can treat the inheritance that the beneficiaries get as income. Of course, that would mean them paying much much much more taxes than they do currently

What's the difference between a gift to a child and inheritance? Take two families, with equal incomes - one pays $20,000 per year for 12 years for their child's schooling, the other saves the money to provide some backing for when their child wants a house of their own, and sends them to public school. After 12 years, the parents die, and while one pays inheritance tax, the other doesn't. Either this is the case, meaning you're giving an incentive to spend rather than save, or you have the ludicrous position we have in the UK where any gift given 7 years before death is also subject to inheritance tax.

Gifts in the US and Canada are treated as income received. There are strict limits on what gifts can be given to a child while remaining tax-exempt. Education is exempted, IIRC. Also, the total value of non-exempted gifts can't exceed a given amount (for some reason 40000$ comes to mind) over the course of the child's life without incurring gift tax. The reason that education is exempted is that it is an intangible asset; the kid can't turn around and sell his education back. He can get a better job and sell his labour, but that's indirect. I agree that gift-giving and estate taxes should be harmonised, but AFAIK right now estate taxes are actually a cheaper way to go than is giving your assets as gifts to your children.

EDIT: messed up the formatting a little bit

[KrazyHorse]

Originally posted by Dauphin


Its why I think the tax should be scrapped. Not because its unfair in principle, just that its got massive loopholes.

Aren't gifts taxed in the UK?

If my parents give me a house then I have to pay income tax on the house.

[Dauphin]

No taxation (except inheritance related laws of 7 years from gift to death). Residence homes are CGT exempt aswell.

[Sandman]

It's money that's already been taxed. The person owns it and pays income tax on it when it's earned, and when they die they pay tax again on it.

Do you object to VAT as well, then?

[KrazyHorse]

Then perhaps you should consider taxing gifts.

http://www.irs.gov/businesses/small/article/0,,id=98968,00.html#gift